Megvii Technology Ltd (曠視科技) for the first time revealed the stunning growth fueled by a nation’s obsession with security.
The start-up backed by Alibaba Group Holding Ltd (阿里巴巴) tripled its revenue to 949 million yuan (US$133 million) in the first half of the year.
It generated more than 73 percent of those sales from artificial-intelligence (AI) services for major clients, such as government agencies, hospitals and real-estate developers, the company said in a filing to the Hong Kong Stock Exchange.
Seven-year-old Megvii is said to be angling to raise as much as US$1 billion in its initial public offering (IPO), becoming the first of China’s fast-rising AI stars to debut and beating Sensetime Group Ltd (商湯科技) to the punch.
However, its share sale will run up against a host of uncertainties from violent pro-democracy protests that have gripped Hong Kong to US President Donald Trump administration’s increasingly aggressive campaign to contain China’s tech champions.
Megvii generates the bulk of its revenue from products that combine software and sensors to help government agencies and other clients enhance public safety and optimize traffic management.
Sales from that business, which it labeled “city IoT solutions,” jumped 270 percent to 694.8 million yuan in the first six months.
Megvii said it served 112 cities in China, 38 percent of the nation’s total, as of June. It posted 5.2 billion yuan in losses for the first half, while adjusted profit reached 32.7 million yuan.
In a list of risk factors, Megvii warned of possible economic and trade restrictions similar to curbs imposed on Huawei Technologies Co (華為). Should that happen, it would prevent the company from procuring technology and impair its ability to develop solutions.
The company added that it has made sure it is compliant with relevant restrictions, while making contingency plans to minimize the negative impact of potential curbs.
Megvii also warned that sanctions on sales of US technology to Huawei might roil industries from consumer electronics to telecommunications.
“Prolonged restrictions against Huawei could cause a turmoil to all such industries, which may in turn materially and adversely affect our business,” it said.
Megvii also sells face-scanning systems to companies from iPhone maker Foxconn Technology Group (富士康) to Lenovo Group Ltd (聯想) and Ant Financial Services Group (螞蟻金服), the payments affiliate that supports Alibaba’s e-commerce business.
The company generated 207.2 million yuan from the segment it dubs “personal IoT solutions,” or 21.8 percent of its revenue.
Its third major business line, solutions for logistics that deploy AI-empowered robots and sensors, made up about 5 percent of revenue.
Megvii counts Alibaba and its financial affiliate Ant Financial, Lenovo and China Mobile Ltd (中國移動) as strategic investors.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to